Britain sees big jump in animal feed raw material prices
Britain’s biggest animal feed supplier, BOCM Pauls, blamed the trend on a 30% jump in the price of wheat for animal feed.
There have been big hikes also for other animal feed ingredients, such as palm oil, cocoa and soya oil, which have risen by 39%, 23%, and 14% respectively since last year.
Meanwhile, winter feed shortages on British farms will also boost the feed market, after dry weather cut silage yields by up to 50%.
Much of Ireland’s animal feed supply is shipped through Britain, and the market trends there will inevitably be positive for Irish grain growers, who can expect to sell at higher prices, but more expensive winter feeding is on the cards to increase costs for livestock feeders here.
Some British economists fear that inflation due to a food price increase will endanger the country’s economic recovery. Farmers are warning of a beef cattle over-supply and price slump because farmers don’t have feed available for them.
Internationally, new controls on milling wheat exports from Ukraine have added to speculation about grain price increases.
European milling wheat future prices for November jumped 8% last Monday to €211 a tonne, the highest in two years, after rising nearly 50% since late June. But they weakened slightly on Tuesday after Russian government sources said their grain exports would not be significantly reduced. The rally followed the worst heatwave and drought in more than a century, which ruined grain crops in Russia, Ukraine and Kazakhstan. Also, the Canadian Wheat Board has forecast a drop of 35% in their wheat harvest.
But world wheat production in 2010 is still on course to be the third highest on record. Reduced demand from the animal feed industry due to the global economic crisis, and much higher tonnages of wheat in global storage, also make a repeat of the very high global grain prices of three years ago unlikely.
